Principles of Economics, 7th Edition

Published by South-Western College
ISBN 10: 128516587X
ISBN 13: 978-1-28516-587-5

Chapter 2 - Part I - Thinking Like an Economist - Problems and Applications - Page 36: 4

Answer

a) A: 40 lawns per day B: 40 cars per day C: 20 lawns and 20 cars per day D: 25 lawns and 25 cars per day b) Please see the graph. c) The graph is bowed out near point D since point D is the most efficient point on the frontier. (Moe and Curly are working at their most productive, and Larry's time is equally split between his tasks.) d) Only allocation C is inefficient. That allocation is inefficient since Curly and Moe are working at the tasks that take more time.

Work Step by Step

a) 10 hours per person Larry--1 lawn/hr or 1 car/hr Moe--1 lawn/hr or 2 cars/hr Curly--2 lawns/hr or 1 car/hr A) mowing lawns $1+1+2=4$ lawns per hour $4*10 =40$ lawns per day B) washing cars $1+2+1=4$ cars per hour $4 * 10=40$ cars per day C) mowing lawns $1*5+1*5+2*5=5+5+10=20$ washing cars $1*5+2*5+1*5=5+10+5=20$ D) mowing lawns $1*5+0*10+2*10=5+0+20=25$ washing cars $1*5+2*10+0*10=5+20+0=25$
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